Summary
Verizon Communications Inc. (VZ) has announced a significant agreement to acquire approximately 43.4 million shares of MCI, Inc. (MCI) common stock from entities affiliated with Carlos Slim Helu. The purchase price is set at $25.72 per share in cash, totaling an initial outlay of over $1.1 billion. This acquisition is a key step towards Verizon's proposed merger with MCI. The transaction is contingent upon standard closing conditions, including regulatory approvals like the expiration of the Hart-Scott-Rodino waiting period, and the absence of any prohibiting laws or orders. An intriguing aspect of the deal includes a potential price adjustment at the end of one year, tied to Verizon's stock performance exceeding a specific threshold, indicating Verizon's confidence in its own valuation while also providing a potential upside for the sellers.
Key Highlights
- 1Verizon agrees to purchase approximately 43.4 million shares of MCI common stock for $25.72 per share in cash.
- 2The total cash consideration for these shares is over $1.1 billion.
- 3This stock purchase is a definitive agreement paving the way for Verizon's proposed merger with MCI.
- 4The transaction is subject to customary closing conditions, including regulatory approvals (e.g., Hart-Scott-Rodino).
- 5Sellers of MCI shares have agreed not to impede the merger process and to support the transaction.
- 6A potential one-year price adjustment clause is included, based on Verizon's common stock price performance relative to $35.52.